Money for Nothing

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In a 2005 press release regarding its service for children, LifeLock says it will "track any unusual 'work activity' with the Social Security Administration." More recently, in one of his e-mails to New Times, LifeLock CEO Davis wrote, "For $25 a year, LifeLock performs an auditing service to make sure your child's Social Security number isn't being fraudulently used by someone else."

Mark Hinkle of the Social Security Administration says such claims simply aren't true. He stresses that the agency doesn't partner with or do audits on behalf of any private company.

Asked again about the matter, LifeLock revealed how its "audit" works. Customers who order the service merely receive a Social Security Administration statement-request form from LifeLock and instructions on how to mail it to the government. Called an SSA-7004, the form is available online at www.socialsecurity.gov.

"Due to the Administration's rules, we are unable to sign this form on your behalf," LifeLock's instructions state.

Speaking for the company, Jason Rose denies LifeLock misleads anyone about how it portrays its service for children.

But to use the oil-change analogy, the "audit" LifeLock claims to perform is like paying Jiffy Lube to hand you a wrench.

LifeLock also makes sure your child has no credit bureau account. Once you give the company your child's personal information, LifeLock attempts to pull a free annual credit report (which any semi-intelligent parent could do in five minutes). If no credit report comes up, as it shouldn't, then everything is okay.

LifeLock doesn't tell customers the employment "audit" won't be accurate. Or that it's not all that necessary. The Social Security Administration has a system in which it mails out letters to parents if computers show that someone under the age of 7 is earning wages.

Even if an illegal immigrant is using your child's Social Security number for employment, that alone won't cause any negative effect. And Hinkle says that unless the immigrant uses the child's name as well as Social Security number, the agency won't print the immigrant's work history on the child's Social Security statement:

"In most cases, if you're talking about fraudulent work, it doesn't even get credited to the earnings report because it doesn't match."

Just days after he attended a seminar on identity theft by Bob and JoAnn Hartle, retired postal worker Mike Wysocki noticed a bunch of strange packages in his mail.

"I had five or six little packets that contained CDs," says Wysocki, 55. "One was eBay Monster, another was how to obtain government grants — odd things."

Wysocki went online and checked his credit card account at Arizona Federal Credit Union. He found 19 charges, all for small amounts and totaling $289, that weren't his. He canceled his card. The next day, he received a bunch of books in the mail.

He asked a police officer why someone would do that — what would they gain by sending him stuff? The cop was stumped, but a credit union fraud specialist told Wysocki it was common. Thieves often test a credit card number with small purchases, and if all goes well, they move to the big stuff.

The credit union told him it would take about four months to investigate, and it would fully reimburse him if he wasn't at fault.

Wysocki says he placed a fraud alert on his credit report with a quick phone call.

But the fraud alert wouldn't stop a similar crime from occurring on another credit card. Credit-monitoring services wouldn't have caught the transaction, because they don't monitor bank and credit union accounts.

The service companies can do nothing to prevent credit card fraud, the most common form of identity theft. Nor can they help with most other forms.

Phoenix police Sergeant Jason Davis, who works with the department's document crimes detail, described a few of the schemes for New Times. Identity thieves, he says, can be pretty inventive.

In a frustrating turnabout, thieves will get someone's personal data and use it to obtain a free credit report. Once thieves find out somebody has a Sears charge card, for example, they can go to Sears and probably make purchases on the account.

The services can't stop that, either.

Another huge problem the services don't prevent is medical identity theft. There's no central reporting agency for medical bills. Davis' boss, Lieutenant Giles Tipsword, says organized theft rings have been getting their hands on Medicare profiles, then selling them to other fraudsters who ran up charges for tens of thousands of dollars of health care.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.